Forex fundamental analysis and economic calendar review (April 10-14)

A review of last week's important events

Last week, the USD came under selling pressure after the monthly PMI report published by ISM showed that economic activity in the manufacturing sector continued to contract at a high pace in March. In addition, the inflation component of this survey, the sub-index of prices paid, and the sub-index of employment reached below 50, indicating a decrease in this sector's employment. Also, the disappointing PMI report of the service sector from the ISM Institute perspective points to a declining acceleration in the service sector business growth.

The US Bureau of Labor Statistics (BLS) reported that the number of job openings rose to 9.9 million on the last business day in February, compared with 10.5 million in January, leading investors to expect the Federal Reserve to leave policy rates unchanged in May. On Friday, the BLS reported that nonfarm payrolls (NFP) rose by 236,000 in March and the unemployment rate fell to 3.5% as the labor force participation rate rose to 62.6%. In addition, wage inflation, as measured by average hourly earnings, fell to 4.2 percent on the year from 4.6 percent in February. The initial reaction to the market led to the dollar strengthening as the employment report on Friday came out better than expected, contrary to market expectations.

The economic calendar review from April 10-14
 

In the coming week, the US inflation data and Canadian interest rate determination will be important in the economic calendar.

Wednesday is significant for the US dollar because the US inflation data will publish and will have a direct and decisive role in the Federal Reserve's decisions. On Wednesday at 12:30 pm UTC, Core CPI y/y (March) (Prev: 5.5% | Fore: 5.6%) and Core CPI m/m (March) (Prev: 0.5 % Fore: 0.4%) and Consumer Price Index - CPI m/m (March) (Prev: 0.4% | Fore: 0.2%) and Consumer Price Index - CPI y/y (March) (Prev: 6.0% | Fore: 5.2%) were published. In general, the market's expectations are for a decrease in inflation. If the monthly core inflation rate is lower than expected, i.e., 0.3% or less, markets can expect the Federal Reserve to keep policy rates steady at the May meeting. As a result, the possibility of the US dollar's weakness is expected in the first moments of the news release. On the other hand, a monthly core inflation release of 0.7% or higher will likely cause investors to continue betting on a 0.25% rate hike and harm the performance of the US dollar.

But the notable point in trading is that the markets have almost considered the weakness of inflation in the prices, so if the inflation is released as expected, the US dollar news may be weak in the first moments, then reverse its path, which is an important point. If the inflation is published higher than expectations, it can create good upward movements for the dollar.

Note that at the moment of the news release, abnormal fluctuations may be seen in the symbols related to the dollar. Observing capital management in trading is recommended.

At 06 pm on Wednesday, the FOMC's last monetary meeting report will publish. If specific points are mentioned about the increase or decrease of the interest rate in the May meeting, it can affect the markets. 

On Thursday at 12:30, the producer price index - PPI m/m (March) (Prev: -0.1% | Fore: 0.1%) will be published. In the shadow of inflation, this index is less important, but if it releases in line with inflation, it can cause more impact on the dollar in the mid-term.
Also, at this time, like every Thursday, the US Unemployment Claims index (Prev: 228K | Fore: 232K) will be published.

On Friday at 12:30, Core Retail Sales Index m/m (March) (Prev: -0.1% | Fore: -0.3%) and Retail Sales Index m/m (March) (Prev: -0.4% | Fore: - 0.4%) will be published. If the data is weak, it can cause the dollar to weaken, and if good data is published, it will lead the dollar to strengthen.
At 02 pm, the Consumer Sentiment and Expectations Index will publish.